Mtu Aero Engines Ag · XETR:MTX
Mtu Aero Engines — Investor Day (November 2010)
80 slides from Mtu Aero Engines's investor day presentation, Nov 9, 2010
Slide 1: Investor and Analyst Day 2010
Investor and Analyst Day 2010 MTU Aero Engines November 9, 2010
Slide 2: Agenda – MTU Investor and Analyst Day 2010
Agenda – MTU Investor and Analyst Day 2010 Time Event Speaker Inka Koljonen 12:20 – 12:30 Welcome Director Investor Relations 12:30 – 12:45 Overview and key messages / Q&A Egon Behle, CEO Dr. Anton Binder 13:00 – 13:15 Re-engining the A320 – Market perspective / Q&A SVP Commercial Programs Re-engini
Slide 3: Agenda – MTU Investor and Analyst Day 2010
Agenda – MTU Investor and Analyst Day 2010 Time Event Speaker Leo Koppers 15:30 – 16:00 Commercial MRO market landscape / Q&A SVP Marketing & Sales Klaus Müller 16:15 – 16:30 MTU growth strategy / Q&A SVP Corporate Development Inka Koljonen 16:45 – 17:00 Quarterly financial disclosure / Q&A Director
Slide 4: Overview and Key Messages
Overview and Key Messages Egon Behle, CEO
Slide 5: Business Highlights / Market Environment
Business Highlights • We are well on our way to achieve 2010 targets • High single-digit growth in revenues expected for 2011 Global International Passenger Traffic Market Environment 40% 280 • Market trends in commercial aerospace remain Monthly traffic (bn. RPKs) strongly supportive 30% 240 • Late
Slide 6: Commercial OEM Business / Commercial MRO Business
Commercial OEM Business • Spare parts show moderate improvement, trend continues into Q4 • Series sales continue to increase, ramping up of GEnx and GP7000 programs will drive strong growth into 2011 • Decision about A320 re-engining moved towards year-end 2010 by Airbus/EADS Commercial MRO Business
Slide 7: Military Business / Cost savings / US$ Hedging
Military Business • Potential defense budget cuts mainly a risk for maintenance in old engine programs • Ramping up of the A400M and U.S. programs will provide future growth Cost savings • Challenge 2010 program on track to meet target savings of 30 m€ in 2010 US$ / Hedging • High volatility in US$
Slide 8: Trends looking into 2011
Trends looking into 2011 MTU group: high single digit growth expected • Commercial new engine sales: 15-20% growth expected based on current delivery schedules • Commercial spares: limited visibility, but supportive market environment, 5-10% growth expected • Commercial MRO: trends similar to spares
Slide 9: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 9
Slide 10: Re-engining the A320 – Market Perspective
Re-engining the A320 – Market Perspective Dr. Anton Binder SVP Commercial Programs
Slide 11: Commercial Aero Engine Market Expected to Generate $740bn of New Engine Sales
The Commercial Aero Engine Market is Expected to Generate $740bn of New Engine Sales over the Next 20 Years Expected Deliveries and Sales 2010-2029: CAGR ~3% 100-120PAX $54bn Sales 1 $340bn $270bn $130bn Widebody Narrowbody RJ, TPs & Business Jet 230+ seats 90-230 seats 20-90 seats Sales $ 46% 36% 1
Slide 12: New Airframer Activities Push Airbus and Boeing
New Airframer Activities Push Airbus and Boeing 2014 2016 2018 2020 2022 2024 2026 CSeries Launched MRJ MS-21 C919 A30X A320EX re-engining new aircraft 737EX 737RS E-JET Replacement November 9, 2010 Investor and Analyst Day 2010 12
Slide 13: Narrow Body Market Characteristics (Today)
Narrow Body Market Characteristics (Today) • Little segmentation (A320, B737, B757) (NB: Wide-body has B767, A330, B787, A340, A350, B777, B747, A380 Products) • Lower end covered by shrinked aircraft (economical challenge) • Higher PAX single aisle A/C have there limits in turn around time • Design
Slide 14: CSeries Operating Cost Advantage
5-abreast CSeries has a Cost Advantage Between 90 and 140 Seats Embraer/Bombardier Operating Cost CS100 CS300 90 140 Seats November 9, 2010 Investor and Analyst Day 2010 14
Slide 15: The CSeries/Pure Power 1000G is Changing the Economics
The CSeries/Pure Power 1000G is Changing the Economics Delta Cash Operating Cost per Seat in % 2 0 Today‘s Product 1 Today‘s Product 2 -2 -4 CSeries C300 -6 -8 -10 -12 -14 -16 -18 • 90 aircraft on order plus 90 options • significant campaign activity ongoing • engine testing underway November 9, 201
Slide 16: Likely Market Scenarios
Likely Market Scenarios Re-engining near term New aircraft long term • Airbus or Boeing decide on re-engining • Short term no re-engining - Airbus more likely to go • Airbus, Boeing likely to lose market • What is the competitor (AI, Boeing) share in the 100 to 125 PAX market doing? (CSeries, price
Slide 17: MTU's Product Offerings: V2500
MTU’s Product Offerings: V2500 • superior product in many ways - fuel burn - reliability - maintainability • 150 operators • 4,200 engines delivered (installed ~ 3,800) • 1,860 engines ordered • delivery: 370 to 460 p.a. MTU is 100% committed to this program. November 9, 2010 Investor and Analyst Da
Slide 18: MTU's Product Offerings: Pure Power 1000 (GTF)
MTU’s Product Offerings: Pure Power 1000 (GTF) • 15% fuel burn advantage • 50% perceived noise reduction • 20% maintenance cost reduction • proven technology • 3 applications to date MTU is 100% committed to this new engine concept. November 9, 2010 Investor and Analyst Day 2010 18
Slide 19: Market Perspective Summary
Market Perspective Summary • The market segment is huge and very important • Significant activity is going on between 70 and 2xx PAX • C Series economics are obvious • 2 scenarios are likely for future NGSA market (Airbus, Boeing) • MTU has superb product offerings for future market demands November
Slide 20: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 20
Slide 21: Re-Engining of the A320 – Engineering Perspective
Re-Engining of the A320 – Engineering Perspective Most Advanced Engine Technology at Lowest Risk Dr. Jörg Henne SVP Engineering and Technology
Slide 22: A320NEO Significantly Reduces Operating Cost Using GTF Technology
The A320NEO Significantly Reduces Operating Cost by Using the Newest Available Green Engine GTF Technology • 15% improvement in fuel burn over today´s products at EIS 2015 • Noise -20 dB better than ICAO Stage 4 T • Maintenance cost significantly better than today´s products • Thrust range 27 to 33K
Slide 23: The Geared Turbofan Engine Concept
The Geared Turbofan Engine Concept Achieving Lowest Fuel Burn and Lowest Noise for Best Cash Operating Cost • highest propulsive efficiency • highest component efficiencies • at lowest weight • at lowest maintenance cost • at lowest noise • at lowest emissions … meeting all production cost targets T
Slide 24: Pratt & Whitney's Reduction Gearbox Experience
Pratt & Whitney’s Reduction Gearbox Experience A Very Reliable Proven Design 8,169 PT6T turboshaft engines in service over 33 million operating hours 4,845 PW100 series engines in service 29,338 PT6A series engine in service over 70 million operating hours over 235 million operating hours Over 42,
Slide 25: Fan Drive Gear System Technology Maturation
The Fan Drive Gear System Technology Maturation High PropFan Demo Engine 13K SHP Counter Rotating System Ground and MD80 Tested ’87 – ‘89 ADP Demo Engine 40K SHP Planetary System Ground, Wind Tunnel and Rig Testing - 600 Hours Risk ’92 – ‘93 Flight Weight Design 32K SHP Planetary & Star Systems 4 Bu
Slide 26: Mature Engine Design due to Technology Readiness
Mature Engine Design due to Technology Readiness and a Stringent Family Approach Technical Risk high Consequent Scaling for A320NEO medium CSeries FETT low Design Maturity Time Ground P&W Flight Airbus Flight Gas MRJ & CSeries A320NEO Demo Demo Demo Generator Certification Technology Program Novembe
Slide 27: Key Enabler – High-Pressure Compressor
Key Enabler – High-Pressure Compressor MTU Shares Component Responsibility with Pratt & Whitney • efficiency well above 90% • 10% weight reduction … maintaining operability HPC technology and low- cost design evolution November 9, 2010 Investor and Analyst Day 2010 27
Slide 28: MTU Technology Program CLAIRE
MTU Technology Program CLAIRE (CLean AIR Engine) Base CLAIRE 1 CLAIRE 2 CLAIRE 3 100 up to up to up to 15% 20% 30% 90 Fuel Burn & CO2 [%] ACARE 80 TARGET 70 * Counter-rotating integrated shrouded V2500 CRISP* IRA** propfan GTF ATF GTF 2013 GTF 2025 GTF 2035 ** Intercooled recuperated Aero Engine 200
Slide 29: Thank you for your attention
… thank you for your attention November 9, 2010 Investor and Analyst Day 2010 29
Slide 30: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 30
Slide 31: Military Business - Update
Military Business - Update Michael Schreyögg, SVP Defense Programs
Slide 32: MTU Defense Product Range Based on Over Fifty Years of Experience
The MTU Defense Product Range is Based on Over Fifty Years of Experience High-tech, Trusted partner state of the art in U.S. defense products programs MTR390 EJ200 GE38 F117 RB199 TP400 F110 F414 MTU Military Programs Decades of experience Tyne T-64 J79 Larzac RR250 November 9, 2010 Investor and Ana
Slide 33: Engine Flight Hours German Airforce
History Engine Flight Hours German Airforce 450.000 Engine Flight Hours [EFH] 400.000 350.000 300.000 250.000 New OEM Programs (TP400, MTR390, EJ200) 200.000 150.000 Programs in Service 100.000 (RB199, RR250, T64, Tyne, J79) 50.000 0 1990 1995 2000 2005 2010 2015 2020 Philosophy in the past • Contin
Slide 34: German Defense Budget in bn €
German Defense Budget in bn € 2009 2010 2011 2012 2013 2014 Defence Budget Defense Budget 31.5 31.4 31.5 30.9 29.6 27.5 Invest Invest 4.0 4.0 4.0 4.0 4.5 5.0 Aerospace 2.0 2.0 2.0 2.0 2.2 2.4 Maintenance Maintenance 2.0 2.0 2.0 2.0 2.0 2.0 Aerospace 1.2 1.2 1.0 1.0 1.0 1.0 Aerospace-related budget r
Slide 35: Bundeswehr – Military Transformation
Bundeswehr – Military Transformation Main consequences of the transformation • Reduction in quantity • Fewer new procurements (FTH, Talarion) • Phase out of weapon systems • Reduction of engine flight hours • New structures to be implemented Restructuring of the German Armed Forces: 8,3 bn€ have to
Slide 36: Military Program Portfolio
Military Program Portfolio 1980 1990 2000 2010 2020 2030 F-4 Services BO-105 Transall Tornado CH-53 Eurofighter Tiger OEM A400M GE38 Cooperation Contract Change of MTU´s Military Product Portfolio in the next future November 9, 2010 Investor and Analyst Day 2010 36
Slide 37: Challenge
Challenge Budget limitations are challenging, but … • provide us with opportunities to expand our services for the air forces. The forces will continue to concentrate on pure military missions. • “The Bundeswehr will increasingly focus on its military core capabilities and sovereign duties. All othe
Slide 38: MTU Military Programmes Summary
MTU Military Programmes Summary • Existing and long-term production and support contracts • Unique expertise in MRO (e.g. services, repair solutions) • Highly trustful and strong customer relations • Change process also provides future opportunities • Continued exploration of International M
Slide 39: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 39
Slide 40: Commercial MRO Market Landscape
Commercial MRO Market Landscape Leo Koppers SVP Marketing & Sales
Slide 41: Passenger Traffic and Engine Fleet Development
Passenger Traffic and Engine Fleet Development Passenger traffic Utilization Total engine fleet1 MTU Maintenance2 RPK (tn) EFHs (mil) +11% # eng New Mature Sunset # eng New Mature Suns et 5 +7% 15 50.000 30.000 +6% +19% 3% 4 12 40.000 24.000 16% 23% 4% 9 35% 3 30.000 18.000 38% 46% Ø Ø 6 20.000 44%
Slide 42: Impact of Global Economic Crisis on Engine MRO
Impact of Global Economic Crisis on Engine MRO Shop visits commercial jet engines Remarks ASFI `07 # SVs 12.500 ASFI ASFI ‘09 CAGR 2010-192 • Return to 2008 levels by 2012 only 2008 ASFI ‘08 Total market - Market further down in 2010 10.000 - Strong recovery expected in 2011 Total +3.3% • MTU Mainte
Slide 43: Market Dynamics and Market Shares
Market Dynamics and Market Shares Com. engine MRO market 2010-2019 (mUS$1) Top 10 providers 2009* 35.000 MRO Provider Market Share CAGR 2010-2019: World (total): 8.3% 1 GE Engine Services 14% 30.000 MTU coverage 10.4% MTU incl. New/Future 11.8% 2 Rolls-Royce2 10-13% 25.000 3 Lufthansa Technik2 7-9%
Slide 44: MTU Maintenance Initiatives
MTU Maintenance Initiatives • Innovative and leading-edge processes (flowline®, MRO InTakt) with strong capacity increase and TAT improvement Cost competitive- • Repair beats replacement philosophy, development of proprietary cutting-edge MTUPlus repairs ness • Make use of low-cost locations (China,
Slide 45: Engine MRO Supplier Landscape & Positioning
Engine MRO* Supplier Landscape & Positioning * Commercial jet aircraft >35 seats, portfolio of JVs ≥50% considered Recent developments: Low OEM Independent STANDARD [incl.CFM56-7] Service Expander Airline • Few failures, bar a few “weak” MTU-Future IHI independents: STANDARD AERO EGAT ADAT- Future M
Slide 46: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 46
Slide 47: MTU Growth Strategy
MTU Growth Strategy Klaus Müller SVP Corporate Development
Slide 48: Demand for Global Mobility will Continue to Grow
Demand for Global Mobility will Continue to Grow 4.1 3.5 Passengers worldwide (billions per year) 2.9 2.4 2.0 1.7 Passenger Traffic Growth Forecast 2000 2005 2010 2015 2020 2025 Source: ICAO, MTU/ASM July 2010 November 9, 2010 Investor and Analyst Day 2010 48
Slide 49: Industry Faces Many New A/C Programs
After a Decade of A/C Upgrades the Industry Faces Many New A/C Programs. MTU is Well Positioned to Participate National Industrialzation Consolidation Deeper Market Segmentation Programs Start Consolidation Global Supply Efficiency / Fuel / Noise Decade US EU EU/US BRA W/Bs (delayed) New entrants of
Slide 50: Some Large Fleets are Moving Towards Maturity
Some Large Fleets are Moving Towards Maturity Fleet growth Mature fleet Sunset fleet Establish Engine EIS, Market success Spare Parts and rise of Cannibalizsation, Surplus + Modifications Repairs/PMAs, Growing Surplus Wide range of PMA, Repairs (LLPs) CF6-80E PW2000 V2500-D5 CFM56 CF34-8´´ -5C T500
Slide 51: MTU will Enhance its Exposure in the Mature Sweet Spot
MTU will Enhance its Exposure in the Mature “Sweet Spot” Fleet growth Mature fleet Sunset fleet Establish Engine EIS, Market success Spare Parts and rise of Cannibalization, Surplus + Modifications Repairs/PMAs, Growing Surplus Wide range of PMA, Repairs (LLPs) CFM56-7 CF6-80E PW2000 GE90G T800 T700
Slide 52: Emergence of New OEM Players will Change Supply Chains
The Emergence of New OEM Players will Change Traditional Supply Chains. New Customers and Market Opportunities for MTU • Established supply chains • Changing supply chains? • Technology leadership • New partnerships? Today: Future: • Established partnerships • MeToo technology (2010) • Four OEMs, fo
Slide 53: Demand for 80,000 Aircraft will Generate ~$850bn Engine Business
Demand for 80,000 Aircraft will Generate ~$850bn Engine Business EJ200 JT8D-200 CF6-80 MTR390 F404 CF6-80 PW300 PW6000 V2500 open GE38 F414 F117 Ø PW500 PW800 PW800 open GTF GTF GEnx GP7000 F110 TP400 ca. 22,000 ca. 27,000 ca. 31,000 16300 Aircraft 12000 Deliveries (2010-2029) 8000 9100 8500 8200 79
Slide 54: €6bn Revenue in 2020
Our Target is to Grow Profitably and Faster than the Market: €6bn Revenue in 2020 7.000 Target corridor 6.000 €6bn Target Growth Drivers: Identified New n.n. Opportunities 5.000 GEnx, New Business CSeries / MRJ 4.000 V2500 (OEM/MRO) Existing GP7000 3.000 Market Growth (CAGR 6,3%) Business CF34 (MRO)
Slide 55: Strategy Framework to Reach Our Growth Target
All Strategic Activities Have to Fit in our Strategy Framework for us to Reach Our Growth Target Profitable Growth Strategic target Customers / Products Branding Shareholders Employees Locations Partners Strategic Target Fields Strengthen core Gain access to Further Maintain business by Make use of
Slide 56: Vision 2020: Targets and Activities
Vision 2020: Targets and Activities Target Projects and Activities (examples): Profitable Grow faster than the market and maintain New programs: GEnx, GE38, PW800, Growth profitability PurePower, GE90 MRO, Parts repair... Customers / We are global partner of all OEMs and airlines. Partnership PW, GE
Slide 57: Summary
Summary • The demand for global mobility is far from being saturated • Many new programs and new emerging players stimulate the market in the next decade • The supply chain offers new opportunities • The market in the next decade opens up many opportunities for MTU to grow profitably • MTU targets p
Slide 58: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 58
Slide 59: Quarterly Financial Disclosure
Quarterly Financial Disclosure Inka Koljonen, Director Investor Relations Dr. Maximilian Brandl, SVP Finance & Accounting,
Slide 60: Introducing a New Format for the Quarterly Results Release
Introducing a New Format for the Quarterly Results Release What´s new? • More information on underlying business trends – on group and segment level • Slightly adjusted presentation structure and layout • Net income will be adjusted for effects out of PPA – consistent with the definition of EBIT - I
Slide 61: Agenda
Principle structure of new quarterly report Agenda • Business Highlights • Financial Highlights • Segment Reporting • Group Key Figures • Guidance • Appendix November 9, 2010 Investor and Analyst Day 2010 61
Slide 62: Business Highlights / Market Environment
Principle structure of new quarterly report Business Highlights • Guidance 2010 confirmed • A320 re-engining decision expected for year-end 2010 Global International Passenger Traffic Market Environment • Market trends in commercial aerospace 40% 280 Monthly traffic (bn. RPKs) remain strongly suppor
Slide 63: Commercial OEM Business / Commercial MRO Business
Principle structure of new quarterly report Commercial OEM Business • Spare parts show moderate improvement, trend continues into Q4 • Series sales continue to increase, ramping up of GEnx and GP7000 programs will drive strong growth into 2011 • Decision about A320 re-engining moved towards year-end
Slide 64: Military Business / Cost savings / US$ Hedging
Principle structure of new quarterly report Military Business • Potential defense budget cuts mainly a risk for maintenance in old engine programs • Ramping up of the A400M and U.S. programs will provide future growth Cost savings • Challenge 2010 program on track to meet target savings of 30 m€ in
Slide 65: Agenda
Principle structure of new quarterly report Agenda • Business Highlights • Financial Highlights • Segment Reporting • Group Key Figures • Guidance • Appendix November 9, 2010 Investor and Analyst Day 2010 65
Slide 66: Financial Highlights
Principle structure of new quarterly report Financial Highlights Revenues (in m€) EBIT adj. (in m€) 2.500 *) in US$ 300 10,8% 11,3% 2.000 +2%*) stable 250 10,0% +7% 200 1.500 226 1.955 1.992 150 1.000 211 5,0% 100 500 50 0 0 0,0% 9M 2009 9M 2010 9M 2009 9M 2010 Net income / EPS reported (in m€ / €)
Slide 67: Agenda
Principle structure of new quarterly report Agenda • Business Highlights • Financial Highlights • Segment Reporting • Group Key Figures • Guidance • Appendix November 9, 2010 Investor and Analyst Day 2010 67
Slide 68: OEM Segment
Principle structure of new quarterly report OEM Segment Order book in m€ 31/12/2009 30/09/2010 Change Order book in m€ 3,965.1 4,066.5 3% Commercial business in US$ 3,662.3 3,881.9 6% Military business 1,422.9 1,222.2 -14% (in m€) 9M 2009 9M 2010 Change Revenues 1,157.6 1,199.9 4% Commercial busines
Slide 69: OEM Segment
Principle structure of new quarterly report OEM Segment (in m€) 9M 2009 9M 2010 Change Revenues 1,157.6 1,199.9 4% Gross profit 234.6 265.2 13% Gross profit margin 20.3% 22.1% R&D self-financed 70.2 95.4 R&D capitalization -5.4 -10.8 EBIT adj. 158.2 165.9 5% EBIT adj. margin 13.7% 13.8% • R&D increa
Slide 70: Commercial MRO Business
Principle structure of new quarterly report Commercial MRO Business (in m€) 31/12/2009 30/09/2010 Change Contract volume 6,759.6 6,227.1 -8% Order book 267.7 247.3 -8% (in m€) 9M 2009 9M 2010 Change Revenues 821.2 814.4 -1% Gross profit 91.3 104.9 15% Gross profit margin 11.1% 12.9% EBIT adj. 55.6 5
Slide 71: Agenda
Principle structure of new quarterly report Agenda • Business Highlights • Financial Highlights • Segment Reporting • Group Key Figures • Guidance • Appendix November 9, 2010 Investor and Analyst Day 2010 71
Slide 72: US$ Exchange Rate / Hedge Portfolio
Principle structure of new quarterly report US$ Exchange Rate / Hedge Portfolio Hedge book as of October 26, 2010 (% of net exposure) m US$ 726 (=82%) 540 (=55%) 330 (=31%) 2010 2011 2012 1.40 1.39 1.33 Average hedge rate (US$/EUR) Hedge Cover 2013-2015: 5-6% (70-80 mUS$) each year at an average hed
Slide 73: P&L Highlights
Principle structure of new quarterly report P&L Highlights (in m€) 9M 2009 9M 2010 Change Revenues 1,954.9 1,992.3 2% EBIT adj. 210.8 226.1 7% Financial result -31.5 -42.1 -34% Interest result -10.3 -9.1 12% Other financial result -21.2 -33.0 -56% • US$ valuations / Interests / others -11.8 -9.8 • N
Slide 74: 9M 2010 Free Cash Flow
Principle structure of new quarterly report 9M 2010 Free Cash Flow Cash Flow in m€ Comments Cash flow from operating activities 250,0 • increased by 15% from 179.8 m€ in Sept. 09 to 207.1 m€ in 207,1 - 167,6 Sept. 10 200,0 Cash flow from investing activities • includes short-term financial securitie
Slide 75: Net Financial Debt improved to 48 m€ in September 2010
Principle structure of new quarterly report Net Financial Debt improved to 48 m€ in September 2010 Dec 31, 2009 Sep 30, 2010 280 m€ 272 m€ Net Debt 12 20 48 m€ Financial assets 53 Derivative financial 224 m€ Net Debt 66 assets 27 142 m€ Short-term financial 65 securities 35 Cash and cash 137 m€ equi
Slide 76: Agenda
Principle structure of new quarterly report Agenda • Business Highlights • Financial Highlights • Segment Reporting • Group Key Figures • Guidance • Appendix November 9, 2010 Investor and Analyst Day 2010 76
Slide 77: Guidance 2010 confirmed
Principle structure of new quarterly report Guidance 2010 confirmed (in m€) FY 2009 Guidance 2010 Revenues 2,611 ~2,750 EBIT adj. 292 ~310 EBIT adj. margin 11.2% stable Free cash flow 120 ~120 Net income 141 stable Reflects new exchange rate assumption of 1.30 $/€ November 9, 2010 Investor and Analy
Slide 78: Q&A
Q&A November 9, 2010 Investor and Analyst Day 2010 78
Slide 79: Summary and Wrap-up
Summary and Wrap-up Reiner Winkler, CFO
Slide 80: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could